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December 18, 2005

Important Tax Legislation for Visual Artists Makes Headway in Congress

While art collectors can get tax breaks by donating artwork to charity, the artists themselves cannot under current law. Ironically, under current federal tax law, the creators of masterpieces are only able to write off the actual costs of the materials, regardless of the fair market value of the pieces. That may change if legislation currently under consideration in Congress continues to make headway.

The U.S. Senate passed legislation in mid-November to provide artists with a full fair-market value charitable deduction for donated artwork. The bill, S2020, the "Tax Relief Act of 2005," includes a provision that would provide artists with a full fair-market value charitable deduction for the donated gifts of their works to museum and library collections.